The Ramsey Show - App - Living Life Without a Credit Score (Hour 3)

Episode Date: February 17, 2023

Jade Warshaw & Rachel Cruze answer your questions and discuss: Getting an apartment without a credit score, from the blog: Living Without a Credit Score, Choosing health insurance, Planning for a loss of income. Have a question for the show? Call 888-825-5225 Weekdays from 2-5pm ET Want a plan for your money? Take our FREE 3 minute assessment: https://bit.ly/3nInETX Listen to all The Ramsey Network podcasts: https://bit.ly/3GxiXm6 Learn more about your ad choices. https://www.megaphone.fm/adchoices Ramsey Solutions Privacy Policy

Девочка-пай Live from the headquarters of Ramsey Solutions, broadcasting from the Pod's moving and storage studio, it's The Ramsey Show, where we help people build wealth, do work that they love, and create actual amazing relationships. I'm your host, Jade Warshaw, today joined by my friend, Rachel Cruz. So good to be with you, Jade. It's so great. I love hosting with you, Rachel.

I do, too. I do, too. When I saw our names for Friday, I thought, it's going to be a good day. Oh, yeah. It's going to be a good day. It's going to be good. We want to take your calls, whatever it is that's on your heart, what's on your mind today. Give us a call.

The number is 888-825-5225. We're going to go straight to the phone lines. We've got Kayla in Dallas, Texas. What's going on, Kayla? Hey, guys. Thanks for taking my call today. Absolutely. I'm calling because I just got an FPU,

and I'm being super compliant because my way has clearly not worked. You can want to do it the Ramsey way, but I have questions just about credit. Like I've cut up my credit card as per, you know, the steps. I'm going forward with it, but my concern is I'm in a studio right now. What if I need to like, I don't know, rent another apartment? Don't I need credit for that? Like maybe I've been brainwashed a little bit too much, but I just wanted to ask the professionals. Sure. That's a really good, I mean, that's something that I think a lot of people worry

about is how am I supposed to live life without a credit score? It's definitely possible. You know, they do use other things to look at your credit history. They'll look at things like cell phone. They'll look at so many other ways of you paying back debt. But do be prepared because when it comes to renting an apartment, if you don't have credit, you are a lot of times going to have to pay more money up front when it comes to like first to last month's rent and things like that. A lot of times, at least in my experience, they have asked for more money up front. We see this too with renting cars and things like that. A lot of times, at least in my experience, they have asked for more money up front. We see this too with renting cars and things like that. Sometimes we get the

short end of the stick because of the way that we're choosing to live our life without debt, but it's still absolutely possible. Do you have anything to add to that, Rachel? Yeah. I mean, I would say, Kayla, usually most apartment complexes that we, you know, as we've done this and heard from people, if you have your first month's rent, last month's rent, security deposit, and like Jade said, other bills to prove that you pay on time. It's not going to be debt, but cell phone, insurance, your current rent that you're renting now, like keeping kind of a ledger of that stuff just to prove and show, I mean, electricity, right right like any bill that you have to say hey

here's my here's my history for the last six months of payment here's first month's rent last month's rent security deposit all in full most places will still rent you that apartment but if they say no guess what you get to go right about half a mile down to another complex and say hey here's my situation you know you may have to go shop around, but people are, you can still rent an apartment. There are still people that do that, that will rent you the apartment. Renting cars, I mean, anything and everything, it is still possible to do without a credit score, without a credit card, all the above. But like Jade said, Kayla, it's not just a plug and play because companies now use this score for a lot of different things.

So there is going to be some runaround a little bit. But let me tell you, the runaround is so much worth it than having to sit there and pay a bunch of credit card bills and car loans. So I would rather take the extra energy and go and do that. And you'll do the same thing, Kayla, when you want to purchase a home. You'll do manual underwriting to get your mortgage versus a credit score. Again, it's going to take a level of extra paperwork extra effort but the extra effort is so much worth it when you are free and you don't owe anyone anything I know that's right I'm proud of you Kayla for doing this man you cut up the credit cards like you're in it you're doing it you're doing a great job that's something I said I wasn't going to do either but

my way doesn't work that's right, just try it Because here's the deal, we always say too If you do this for six months, you get out of debt And you hate being debt free It'll be there waiting for you You can go right back in It's way easier to go into debt than it is to get out So yeah, there's always your chance if that's what you want

But I'm telling you Kayla, once you taste that freedom You're not going to want to go back Man, she's doing a great job But she brings up a really interesting point because, you know, when it comes to apartments, you know, that is the thing people think, man, like, how am I going to get out of this? But one thing I would say for anybody listening, if you are renting, even if you're renting, like even if you're living with your parents, right, but you're paying rent to them, keep

record of that. Like actually write them a check or do like you're paying rent to them, keep record of that. Actually write them a check or do a transfer, something that you can keep record of. Because when you are ready to move out, whether it be into your own home or into an apartment, they want to see a history that you've been paying rent. And I think a lot of times, Kayla wasn't living with her parents, but a lot of times when people are living with their parents, it's kind of lackadaisical. It's like, oh, my mom, my mom, you know, I give her some money here or there. But it's really important to keep record of that because some at some point you are

going to want to move out. It's a great point. And you need to have record of that. So yeah, we have actually a fine print episode, episode seven of the podcast, The Fine Print. It's the dirty truth behind your credit score. And George Campbell walks you through every scenario about when you need a credit score and how you can get around it without a credit score. So make sure to check out that episode again of The Fine Print, episode seven. That'll be helpful. That'll be very helpful. I remember that episode. So folks, if you listen to The Ramsey Show, we're on five days a week, all the time on podcasts. You can come on any day and there's probably going to be episodes on there, new episodes. Can you share it?

If this show has helped you in any way, consider sharing the show with somebody. Go on to YouTube, like the show, leave a positive review. But let me tell you something. Don't don't be leaving any negative comments. No, I have nothing nice to say. Don say anything that's that's what mama said if you don't have anything nice to say don't say anything at all because i've seen some of you in the comments don't think i don't see it i you know it's so funny to me and again if that's what you guys want to do and whatever but it's a free country i i just don't i don't think unless i bought a

product and it was just crap and i'm like i I need other people to know not to buy this because it's a scam or whatever the thing is like it doesn't look like the picture or whatever. But like on people's podcasts or even the Instagram picture, like, yeah, it's just so fun. I just can't. I would never. I just I just can't. I don't even I don't even have the energy. Like I see something I don't like and I just kind of keep going. I got kids screaming. I have worked. I see something I don't like and I just kind of keep going. I got kids screaming.

I have things to do. I don't have the energy to sit there, Jade, and press the comment button and type. And write a whole thing. I don't know. I just don't. It's just funny to me. I don't know why. I don't know why.

Look, somebody told me that my sweater looked like Fruity Pebbles. Hey, I got one. Someone said it's a guilty as charged question for our Smart Money Happy Hour podcast. And I got a direct message. And she said, I don't have a guiltiest charge question, but you are guilty of wearing the ugliest sweater I've ever seen. And I was like, well, sorry, Ashley. Ashley from Idaho.

Sorry. I like my sweater. Oh, yeah. That's what she said to me I was like jeez that we need to collect all of these and do a segment on them we should do a segment of all the mean comments all the mean comments we get James my favorite and and honestly I should probably go on there and say thank you my favorite comment was from last week somebody said Jade Warshaw has the biggest lips of all the personalities and And you said, that's right. I was like, come on.

And this ain't injections. People pay to have Jade Warshaw. Okay. But this is all we're saying. Come on there. Leave a comment. Tell people how much you love the show. That's right.

How much it's helped you. Share it with a neighbor. Because honestly, what we're sharing on here is life changing. People are transforming their entire lives because of these principles. I'm one of these people. Rachel, I know you're one of these people. This show, the content that we're talking about, guys, it is powerful, powerful stuff.

Like, share, subscribe. We would really appreciate it. It doesn't cost you a thing. This is The Ramsey Show. You're listening to The Ramsey Show. You're listening to The Ramsey Show. I'm Jade Warshaw, joined by Rachel Cruz. And as always, we're taking calls about your life, whatever's going on in your life, your money. It could be something like taxes because it's tax season.

And I know that a lot of you are like, oh my gosh, this time of year, it's so stressful. It does not need to feel like that. A lot of you have questions about taxes. We totally get that. Taxes are confusing. Can we just admit that right now, Rachel? Oh, it's so... So to help you get a better... I'm not great at it. I give it to Winston and then we go get help. But I'm like, I don't want to deal with it. It stresses me out. And that is the correct stance to take, Rachel Cruz. That is correct.

So to help you get a better handle on them, let us unpack a couple of questions from our listeners because this is stuff that we all deal with. So one listener says, I'm so confused about the child tax credit this year. Why haven't I gotten mine from last year? All right. A lot of people are asking that question. And here's the deal. Here's what's up with the child tax credit. During COVID,

the government made changes to it. And that kind of affected the way we viewed it, right? We thought, oh, this is normal. But that wasn't normal. That was just because of COVID. So during COVID, this tax credit already existed, but they increased the amount that they were giving a lot more yeah so you're seeing like you know depending on how many kids you had that much money was going you know into your account so parents got half of that money up front in monthly installments do you guys remember that we were all getting you know however many kids you got some people were getting six hundred dollars some people were getting you know nine hundred dollars that sort of deal and people got used to that money rachel yes and then the policies changed and things went back to normal and that money went

away. So the other half was given when you filed your taxes, which is the normal way. And this change expired because state of emergency was over. So that change expired December 2021. So that means we're now back to business as usual. It didn't go away. It just means that you can claim the child tax credit, which is $2,000 per qualifying child under age 17 when you file your taxes. You're not getting it ahead of time in installments.

They're just adding it to your taxes like they used to. So for more tips and software that can help you file with confidence, go ahead and head to RamseySolutions.com slash SmartTax. Ramsey SmartTax will guide you through the online process with low upfront pricing and Rachel, no hidden fees. I love that. Again, RamseySolutions.com slash SmartTax. If you have any questions about it, we're here for you. And we're here taking your questions today about your life, your money. Give us a call. The call, the number is 888-825-5225. We are here to answer your questions. So let's take a call now. We're going to go to Benjamin in Detroit. What's going

on, Benjamin? What's going on? Hey, Jade. Yeah. Rachel. Hey, it's a pleasure to get to talk to you all. Thanks for taking my call. Absolutely. Thanks for calling in. How can we help? Oh, man. I'm calling because, well, you know, my wife and I were on Baby Step 3B. All right. We've, you know, within two years, we got out about, you know, just over $65,000 in debt. We're super excited about not owing anyone. It's been good. Congrats. But the question has been, we've discussed it a couple of times before and trying to figure out like guidelines for merging our health insurance. Like we've merged our finances, but health insurance is, you know, it's another item

and, you know, we're both paying for it. But I'm just curious, like, what are the thoughts and what are the directions or guidelines for merging health insurance? And is it is it absolutely necessary like the finances? Yeah, no, it is not. You want to find the cheapest option. And so, in fact, how we in our house, Benjamin, my husband has his own. He's on his own policy and it's cheaper for me to have just the kids, just the way that the policies work versus us doing a big family plan. It's actually cheaper for Winston to be on his own. So no, the idea of merging money when it comes to getting married is an idea of unity and oneness. But with health insurance specifically, I would say just to have the best deal. So look at different plans. If your wife works, if you work,

if you're getting it through an employer, both pull up and say, hey, okay, is it cheaper to have an individual plan here and then a family plan there? Or is it cheaper to do the whole family plan together? So yeah, I would look to see what is, what's the cheapest for you guys with the coverage that you guys want.

Do you get health? Do both of you get health as a benefit through your work or are you self-employed? We both get a benefit through work. And, you know, the paperwork is so wild and hard to read. Yes, it is.

Who's the person that can really talk through that? Well, usually your HR, yeah, the HR of the company, you should be able to sit down and look at the different plans and get a really, I mean, what I would do because they're in that stuff day in and day out i know our hr department man they they're looking at

stuff constantly and so uh i would even say benjamin to just tell your hr director like hey listen i this is a lot and i need this like dumbed down like that's what i would say give me the fifth grade level of all the different options because you're going to have option a b c or you know whatever it is uh get that have your wife do the same and y'all just sit down one night and say okay let's just price this out you know if what would it look like um for the kids to be on mine over here what's the family plan there what's the family plan at her work what's the individual plan at her work and you know and you can kind of just piece it together but you're going to want all that information and ask them to do it not just to print off an 80 page pamphlet or something you know for you ask them to go through it and help you understand it that's right yeah but it's

a that's a great great question that is a great question does that give you the answer that you need oh that definitely gives me the answer you know i'll definitely keep going back and listening over again and um yeah we have to get together and talk about it. I love it. Good, good. Well, congratulations on paying off $65,000 of debt. That's super duper excited. That's right.

And today's question, Jade, comes from Rick in Iowa. I am new to the program, so I have a quick dumb question. There are no dumb questions, Jade. Mentally, I want to keep maxing out my 401k and my 457. I think it's against your steps, but I don't want to miss out on a year of doing this. If I stop for a year and pay off my debt, I will lose a lot of investing and maybe a little tax benefit. Everyone's situation is different, but I'm not sure what to do. Thanks for your advice.

So we definitely still, Rick, would recommend pausing while you have debts. And if you miss out for a year, you're gonna be okay. You're gonna be fine. Because you're gonna have money. You're gonna have money. Yep.

And you're able to invest more. And this is how it works. Yeah, when people are focused, especially when it comes to baby step two and paying off debt the more focused and planned you are and every part every ounce of your income that you have to go to this debt and you are it's an intense focus yeah it does something and when you say hey I'm going to pause this thing over here that I really want let that be a level of motivation to be like I want to keep investing so like I'm going to pause this thing over here that I really want. Let that be a level of motivation to be like, I want to keep investing. So like, I'm going to pay this off as quickly as

possible. Exactly. So I can get to that. Exactly. Most people, they can't wait to start investing. Let that fuel your fire to go even quickly, even more quickly through getting your debt paid off, getting three to six months saved up. Because here's the thing, the baby steps work when you work them and they work when you work them in order. And what happens all the time, I see it all the time, people get excited because they're looking at TikTok, they're looking at Instagram, and they're seeing all these videos about compound interest and investing. And they get hyped up, which you should.

Like investing is exciting. However, if you start investing too soon, you don't have an emergency fund, and you've got a bunch of debt, Murphy comes. That's right. Something's going to happen. And then people take out money out their 401k, investing too soon you don't have an emergency fund and you've got a bunch of debt murphy comes that's right something's gonna happen and then people take out money out their 401k or they or they take a loan against it and then it just ends up being a terrible mess 401k loans i mean we're seeing more and more of them now and it's like if you would just work the baby steps in order

and the thing is here's the thing most people are not investing 15 right now like they're investing three or five to the match and it's like if you work the baby steps when you get to baby step four you're investing 15 that's a that's a pretty that's more than we give to the lord's house okay 10 is the tie then here we are giving 15 that's excellent that's so much money you are going to more than make up for it yeah you're gonna be just fine it's better to walk the steps in order than to not you know and then it's like next thing you know you're taking out a 401k loan for beyonce tickets oh have you seen that girl have i seen it i i got some articles sent to me and i was like what what is happening 401k loans

people queen b for queen b it's still not worth it and they're worth it a 10 penalty and they're Like, what? What is happening? 401k loans. For Queen B. For Queen B. It's still not worth it. Still not worth it. A 10% penalty and they're having to pay income taxes on that 401k loan? Someone took equity out of their house. Got a loan off their house for Taylor Swift tickets. I heard that one too. Don't do it.

Don't do it. Have mercy on the soul. There's no such thing as a dumb question. Just go to YouTube and watch music videos. No such thing as a dumb question, but dumb things. It's a little. What's that? Single ladies.

Oh, that's the single ladies? Don't do it. Do not do it. This is The Ramsey Show. You are listening to The Ramsey Show and live in the lobby of Ramsey Solutions on the debt-free stage. We've got Michael. What's going on, Michael? How are you doing? I'm doing great. How are you? I'm good. Where are you from? I was born in Chatsworth, Georgia, and I work in Duluth, Georgia right now.

Awesome. Awesome. So you're obviously here to do your debt-free scream. How much debt have you paid off? Almost $30,000, $29,500. Nice. How long did it take you? Two years and three months. Nice. Right on point. And what was your range of, like, what were you making during that time when you did it? The range is pretty big. So when I started, I was a long-term sub and i made about a hundred dollars a day so and then i

went part-time so i started at about seventeen thousand dollars and did some side gigs and got it up to about twenty one thousand uh and i think i made close to $54,000 this past year. Nice. Just climbing and climbing and climbing. Very, very cool. So what happened to kind of get you, what got your juices flowing that said, I got to get this debt paid off? Well, once I started working,

I was getting money to keep teaching. Teachers were getting a lot of money to not quit, basically. Brian Kemp was giving us some money, and there was COVID relief funds. And I thought it would be a great gift to my parents, who are here with me today, to pay off my car. My mom was making the car payment every month, and I just thought it would be a kind gesture, if anything. And then someone said something about this debt snowball thing and this Dave Ramsey show. And I listened to it. And in the first hour, I realized I had $22,000 more to go plus the credit card debt. And I was like, it would be great to start off the

rest of my career and my life debt-free, everything in the positive positive to have a positive net worth. So that was the goal. Wow. So you had, you said car, car, car note debt, credit card debt. Was there anything else rolled into that 30K? Yes. $22,500 of student loans. Yes. Oh, Sally Mae. Of course. I know it's assumed now, you know. Oh, amazing job. Okay. So what were the things that you did to help you get out of debt? Cause there's other Michaels listening right now and they're thinking, man, his story, this is, this is me. Where do I even begin? What do I do? What were the things that really got you progress quickly? The budget using the every, the every dollar app every day. And I found just by keeping track of it, you make better decisions.

And I was $1,000 to $2,000 every month to the student loans for two years. And it was a little over 50% of my income. Having two roommates certainly helps. Having my parents help, it was a lot. But to buy a $5 coffee from Starbucks is one thing. But to then have to go home, open up the app and type into the computer, I spent $5 on a coffee. You're less likely to do that every day. So for sure, keeping the budget was the biggest thing. I mean, and you really for two years paying off $30,000. And with that income, I mean, you really shrank your lifestyle

and you upped your income obviously through that process. But I'm like that, that math that you really sacrificed in those two years. Yeah. Did it feel like it was, was it hard? Yeah. The biggest thing I had to give up was eating out the coffee and Legos. I'm a big Legos guy. I haven't bought Legos in two years and it seems like expensive. I haven't bought Legos in two years. And it seems like expensive. Yes. Especially as soon as I started Lego was coming out with six, seven, $800 Lego sets. I just wanted so bad. Um, but I, I had to stop. So, so was it worth it? Was the thing that you love the most? Was it worth it to sacrifice temporarily? Absolutely. Absolutely. And now if I had room for it, I don't have room for all those

Lego sets, but I could certainly do that. But now I'm working on the emergency fund. So I'll keep putting it off for a few more years. That's so great. So your parents are sitting over here in the lobby. I'm assuming they're your parents. Yes, ma'am. How, I'm sure they're very proud, very, very proud of you. So were they some of your big cheerleaders in this time or who else was kind of cheering you on through this journey? They were certainly my biggest cheerleaders and my biggest financial help. College costs a lot more than $22,000

and they helped me cover a lot of it. So we only took out that much. And like I said, my mom was trying to pay on my car and at the beginning of this, my other cheerleaders were my my fabulous co-workers in the fine arts department they were always asking me how much is left how much did I pay this month oh that's great what did I do with that Christmas bonus oh wow built-in accountability yes um so certainly them those those are my big cheerleaders my co-workers and my family I love it love it love

it so we know the Legos like that was a big sacrifice, but emotionally, like what was the hardest part of this journey? Cause you ran it two years. I mean, that's nothing to sneeze at, two years. What was the hardest part? Like what was the part that every day it was like, okay, like I just gotta keep doing X, Y, Z. There was a point, looking forward to like the five and 10,000s

really got me through it because I paid off the car, I paid off the credit card and then I got to 20,000 and 10,000s really got me through it because I paid off the car, I paid off the credit card, and then I got to 20,000. And then it seemed like forever, like no progress was being made. I would pay thousands of dollars and still owed 17. And then one day I was under 10 and it was like the home stretch. So that was what really got me through, but it just felt like forever, those two years, especially right in the middle. Yeah, so how does it feel now,

standing on that stage, and it's all paid off, the $20,000 mountain has been climbed and conquered by you, and now you sit on this side with no payments. How does it feel? It's like freedom. I could go anywhere in the world. I could save up. I could buy a new car, or not a new car used car just by saving up you know a thousand dollars a month for the next two

years i could get a really nice car if i wanted to you know being 24 i'm 25 now in in looking at everything with with opportunity that's the best feeling. Oh, I love that. Yeah. The world is your oyster. I know. And what's so exciting for you is that we see people on the stage a lot and then we walk with them through their whole journey. And so many of them, one of the biggest things they say is, I wish I had done this earlier. Yes.

And so what is so great about your story, honestly, is your age, your stage of life. And you're like, I'm going to clean this up now when I'm young. And that way, I mean, the wealth you're going to build, the investing you're going to be able to do, the generosity that's going to flow from you and your life, that is a beautiful, beautiful legacy. And so it's just, it's incredible, incredible to see it because I know it's hard and I know people probably made fun of you and you're thinking, oh God, this is, I want to enjoy life and I'm here sacrificing. But those two years give you the next 20, 40 years of your life.

How old are you, Michael? To have that freedom. I'm 24. Oh, 24. I cannot wait. You're going to be back on that stage. Baby Steps Millionaire. Man, we are so, so, so proud of you.

Well, we've got the live and give box for you. That's your chance to gift, you know, everything you've learned, you know, everything that's brought you to this point. You can gift it to somebody else. It includes total money makeover, baby steps, millionaires, and a year of FPU. So you can gift that to somebody else. But without further ado, are you ready for this? We've got Michael.

He is here and he is doing his debt-free scream. He's paid off 30K in almost two years, making 17K to 54K. Are you ready to count it down? Yes. All right, let's hear a debt-free scream. Three, two, one. I'm debt-free! Oh my goodness gracious.

So great. That's what it's about, Rachel. That is what it's about. This. That is what it's about. This guy was willing to sacrifice to win. He took the, he heard the message and he applied it. And you know what? And it's everyday people that are doing this. It's everyday people.

And they just decide. Yes. To make a change. Yes. And the other thing that we see consistently is that they believe they can. Yes. So those of you out there that you're overwhelmed, you feel like the news is yelling at you about inflation and job reports.

There's fear. You don't know what's going on. You feel out of control. I'm telling you, there is a system, a plan that anyone can do, regardless of your income, regardless of your debt level. The timeline may be different and will be different for every single one of you out there. But Michael is living proof. That's right.

That you can one day decide, I'm done. That's right. Financial Peace University, that is the plan. If you can get enrolled in Financial Peace University, as a matter of fact, I'm doing a class. You're coordinating, right? I'm coordinating. It starts March 1st. Even if you don't, look, I'd love if you signed up for my class.

But even if you don't, please get hooked up with Financial Peace. I was talking to a girl online just before the segment, and she was like, oh, I just don't know if I want to commit. Commit, because if you commit, you could end up like Michael on stage in just a short period of time declaring that you're debt free. Amen. It is worth the time. It's worth the effort.

Getting out of debt, guys, you can change your life. We believe you can debt free. Amen. It is worth the time. It's worth the effort. Getting out of debt, guys, you can change your life. We believe you can do it. Now it's time for you to believe you can do it and get signed up to make that change today. This is The Ramsey Show.

You are listening to The Ramsey Show. I'm Jade Warshaw, your host, joined this hour by Rachel Cruz. And we're taking calls about your life and your money. The number is easy. It's 888-825-5225. And we've got our scripture and quote of the day. Oh, I love this one.

We have brought nothing into the world, so we cannot take anything out of it either. Ooh, that's poignant. I love that one. And Priscilla Schreier. Ooh, I love Priscilla. Me too. Yes. Contentment is the equilibrium between the enjoyment of life now and the anticipation

of what is to come. Ooh, that's good. Ooh, that is good. That is good. I love Priscilla. She's got some good stuff. She is good. And her brother, Anthony Evans.

Woo. Such a great singer. All right, guys. This week in the Ramsey newsletter, we are going to be exploring 10 things that people do to be successful in retirement. I'm interested in that. Daydreaming about retirement is one thing, but actually getting to live those dreams takes very careful planning.

We'll lay out the steps for a great retirement so you can make your golden years your best years. Simply sign up for free at ramseysolutions.com slash newsletter to subscribe to our Sunday newsletter to get the full list. I am really loving this company newsletter because it's different. Like, yes, there's always good content, such good content. You never know what's going to be in there, but I can guarantee you this, it will be helpful.

So with that, let's go to the phone lines. We've got a caller calling in. This is Christine from Seattle, Washington. How can we help you today, Christine? Hi, ladies. I'm so excited to talk to you. Hello. We're excited to talk to you too.

So I have a question. I'm in bs2 right now and my husband wants to have bariatric surgery which is great um i've had it as well it's been life-changing but with it in my insurance will cover most of it i'm not worried about that part my husband does construction so part of the post-op recovery is not lifting a lot. And so it'll be about six weeks for recovery for him. So during that six weeks, we won't be getting a paycheck from him. So what's the best way to save for that when that time comes? Cause it's usually about a six-month process to go meet the criteria for insurance to cover it. So we have some time to save, but how do I save for that? How do we save for that while paying off debt? I think that in this case, well, first off,

is his doctor suggesting that he have this surgery or is it just kind of elective? The doc. The doc is suggesting it okay in that case i would pause baby step two i would pause baby step two and i would stack up all the cash yeah that you need to get this done because you're you're gonna have the deductible most likely you're gonna have the loss of income because of the recovery time and in this case it's kind of like one of those many it's just a few things that we would pause the baby steps for. But this qualifies as one of them, like major health situation. So I would pause them.

Do you know how much it's all going to cost? My insurance will cover like most, like it's like 60-ish. Okay. And my husband or my insurance will cover like most of it. Like I had to pay $2,500. So it wasn't that bad but you have to pay for also for all like the mental health evaluation all the nutritional classes all that stuff so how much is all that how much is all that do you know ballpark

like two to three thousand okay maybe is that including your deductible are you going to hit your deductible on this i yeah yeah okay i'll hit it before then okay and then um have you guys do you know your expenses week to week of of how much it costs for you guys to to live off of that you're gonna need yeah okay it'll be like like 3 500 3500 total okay perfect yeah and how much are you guys making like what do you bring in now per month um about five okay so this is gonna cost you go ahead well sorry go ahead oh no I was gonna say so from what you said the surgery um itself is 35 did i get 3500 from that and then 2500 a week that it's costing i just want to make sure 5500 for all the surgery stuff 3500 ah okay so yeah about nine yeah about nine grand that you guys are going to need out of pockets

to make sure you cover all the yeah the medical stuff and to live off of. Because what I would say to Christina, since you guys are on baby step two, I would look at your budget and say, okay, what are necessities? And if there's things that you can cut in that time to limit that 9,000, like that 3,500, because I want you to still be paying on your debt snowball.

Since you guys have six months to save for this, that's plenty of time to save for this and still be working your debt snowball. So we want you to pause it to make sure you have that cash in the bank. But then I want you to continue to work the debt snowball because I don't want you guys to lose momentum if it's going to be another six to eight months. Because how much debt do you guys have? With school loans, I have about $15,000. And then in cars, we have a truck and a car of $30,000. Okay, so I have a question for you. Since you've already had the surgery, you're healthy and well, is there a way that you guys can also increase your income during this time? Because you said

it's going to be about a six month span that you have to go through, you know, all the red tape before the surgery even happens. So that's it. Yeah, yeah. So there's an opportunity of time there. Absolutely, yeah. My husband, because of construction, he picks up side jobs on the weekends, and then I do nursing contract work.

Okay, great. How much do you guys make a year? Like 90. 90, okay. So, yeah so yeah i mean then there's your plan the plan is to increase your income as much as you can during the six months and pause the baby steps stack up that money there's going to be extra you're not all the money that you stack up is not going to go on to this medical debt and as soon as everything's over you're in the clear throw whatever's left onto the baby steps

and resume the debt snowball how does that sound does that sound like it's going to work for you christine yeah yeah it sounds perfect i just wasn't sure like where to place it yeah i almost i don't know jay what would you think yeah okay what would you think about this what if they saved the 9 000 that they need put it in a separate savings account, and then they just kept on with the debt snowball? I like that. Are you nervous medically something's going to happen? I'm nervous about that. They need some more cushion because of a major surgery.

I'm a little bit nervous about it. I just want to double check. Your deductible is only $2,500. Is that what you said? I just want to make sure that you have enough. No, no, no. So my deductible is 3000. Okay.

But I'll, I'll meet that before the, even the surgery hits because of like other medical stuff. Okay. Isn't already. So I'll meet my deductible through other, for other medical stuff by like July and then then everything will be covered. Okay. Okay. Okay. And what I have to pay out of pocket,

like for what I, for my surgery was 2,500 bucks. I just feel like whenever there's a recovery, there's that projected time where it's like, it'll most likely be this much time, but you never know. Like some people, it takes them a little bit longer.

So I would just be very concerned. Like I would shoot a little bit past it so that there's extra. I do think that because you're still working and because you guys have a nice income, there is the ability to do both at the same time. Yeah. Yeah. Definitely get the $9,000 saved. I think you can keep going. I think this is one of those things that once you have the money there and you realize how quickly you have it,'s like well we're just sitting like we may as well put this money on debt i don't think that you have

to be paused for a full six months if that makes sense i agree with that you know what i mean so hopefully that helps out christine i think that you guys are in a really great spot you're thinking through this on all the in all the right ways just pile up as much money as you can maybe you sell the thirty thousand dollar car get out of the car the car loan. And that relieves a lot. That does relieve a lot. Yeah. I like that idea. What's the car worth?

$20,000. Girl, it might be worth it. It might be worth it. And y'all could be out of debt going into the surgery with money saved. Oh, yes. An emergency fund. I mean, like, if y'all really just did it, Christine, you could. debt going into the surgery with money saved oh yeah an emergency fund i mean like that would feel really just just did it christine you could and if y'all gonna be making more than 90 that's

gonna be doing some side hustles and stuff that's right i like that idea it's the challenge we're giving you it is the challenge but make sure you have to to jade's point though you know a big life change is happening that's kind of been the theme i feel like of this show to have that cushion because i don't want you going into medical debt because you don't have any cash. So you know something is coming. Save up.

Be conservative. Above and beyond maybe the $9,000 just to play it safe. I would. And then start attacking this debt and kind of get it out. Like have this crazy goal.

What if we were debt free by the time the surgery came? Look, anything is possible. If they get rid of that car, a lot is possible. And speaking of that, that does it for today's show. Be sure to join us the next time, guys. And remember this, when it comes to changing your life and your money, y'all can tell me that you won't do it. But please, please, please do not tell me that you can't. All things are possible with God on your side. You can do this. This is The Ramsey Show. Hey, what's up, guys?

It's Jade. Look, if you like what you heard in this episode and want to know more about getting started on the Ramsey baby steps, go to ramseysolutions.com and click the Get Started button. We'll help you figure out the best next step for you based on your specific situation. That's ramseysolutions.com and click Get Started.